Monday, July 16, 2012

Devices Now Becoming a Way for Application Providers to Connect Consumers with Apps

“We always wanted to be in the hardware business,” Google Chairman Eric Schmidt says. That comment, whether fully accurate as a description of Google's thinking or not, does seem to describe current thinking in much of the applications business.

Sony has for decades argued that ownership of content was important for selling TVs. Apple found that iTunes enabled it to create a dominant position in the MP-3 player market. The App Store has been crucial for iPad and iPhone sales, in the same way that the Android Market and Google Play have been important for sales of Android devices.

Amazon's content richness is a key reason for the success of the Kindle Fire. So though it might not be a feasible strategy for every application provider, it certainly seems true that an integrated device plus content and software strategy makes increasing sense.

In other markets, the success of the Square mobile software that turns a tablet or a smart phone into a retail point of sale terminal provides another example of how hardware enables a software or service business.

And Oracle has seen value in bundling hardware with enterprise applications.

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